MEDIA, TECH, BUSINESS MODELS

By the end of 2014, many news media will collect around 50% of their page views via mobile devices. Here are trends to remember before devising a mobile strategy. (First of a two-part series.)

In the news business, mobile investments are on the rise. That’s the pragmatic response to a major trend: Users shift from web to mobile. Already, all major media outlets are bracing for a momentous threshold: 50% of their viewership coming from mobile devices (smartphones and tablets). Unfortunately, the revenue stream is not likely to follow anytime soon: making users pay for mobile content has proven much more difficult than hoped for. As for advertising, the code has yet to be cracked for (a) finding formats that won’t trigger massive user rejection, and (b) monetizing in ways comparable to the web (i.e. within the context of a controlled deflation). Let’s dive into a few facts:

Apps vs. WebApps or Mobile sites. A couple of years ago, I was among those who defended web apps (i.e. encapsulated HTML5 coding, not tied to a specific OS platform) vs. native apps (for iOS, Android, Windows Phone). The idea was to give publishers more freedom and to avoid the 30% app store levy. Also, every publisher had in mind the success enjoyed by the FT.com when it managed to put all its eggs in its web app and so retain complete control over the relationship with its customers.

All of the above remains true but, from the users’ perspective, facts speak loudly: According to Flurry Analytics, apps now account for 86% of the time spent by mobile users vs. 14% for mobile sites (including web apps.) A year ago, the balance was 80% for apps and 20% for mobile web.

Trend #1: Native apps lead the game
at the expense of web apps and mobile sites

One remark, though: the result must take in account the weight of games and Facebook apps that account for 50% of the time spent on mobile. News-related usage leans more to mobile as there is not (yet) demand for complex rendering as in a gaming app. But as far news applications are concerned, we haven’t seen major breakthroughs in mobile web or web apps over the last months and it seems development is stalling.

News vs. the rest of the app world. On a daily total of 2hrs 50mn spent by mobile users (source: eMarketer), 2% to 5% of that time is spent on news. Once you turn to growth, the small percentage number starts to look better: The news segment is growing faster (+64% Y/Y) than messaging and social (+28%) or gaming and entertainment (+9% each); the fastest usage segment being the productivity apps (+119%) and that’s due to the transfer of professional uses from the desktop to the mobile.

Trend #2: On mobile, news is growing faster
than game or social

…And it will grow stronger as publishers will deploy their best efforts to adjust contents and features to small screens and on-the-go usage and as mobile competitors multiply.

iOS vs. Android: the monetization issue. Should publishers go for volume or focus on the ARPU (revenue per user)? If that’s the reasoning, the picture is pretty clear: an iOS customer brings on average five times more money than an Android user. And the gap is not about to close. However, Android OS has about one billion users vs. 470m users for iOS, but most of Android users are in low income countries, where phones can cost as little as $80, and prices are falling fast. By contrast, an iPhone will cost around $600 (without a carrier contract) and the not-so-successful “cheap” iPhone 5C shows that iPhone is likely to remain a premium product.

Trend #3: There is more money to make on iOS
than Android and that’s not likely to change

Beside, we must take in account two sub-trends: iOS will gain in sophistication with the arrival of iOS 8 (see Jean-Louis’ recent column about iOS 8 being the real version 2.0 of iOS) and a new breed of applications based on the new Swift programming language. Put differently: Advanced functionalities in Swift/iOS 8-based apps will raise the level of user expectations; publishers will be forced to respond accordingly: as apps reside side by side on the same mobile screen, news apps will be required to display the same level of sophistication than, say, a gaming app — that’s also why I’m less bullish on web apps. Behind the iOS/Android gap lies another question: Should publishers have the same app (content, features, revenue model across) all platforms – or must they tailor their product to platform “moneygraphics”? That’s an open question.

I’ll stop here for today. Next week, I’ll explore trends and options for business models, marketing tactics, why it could be interesting to link a news app to the smartphone accelerometer and why news media should tap into game developers for certain types of qualifications.

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33 Comments

The woman in the photo is smiling as she struggles to hold a phone the size of a suitcase up to her ear. As soon as the photo was taken she was probably happy to let the damn thing fall to the floor.

obarthelemyJul 07, 2014 @ 10:54

I’ve been surprised at that recurring discussion, until I had look at iPhones, where the distinction between app, web app and web sites is much starker than on Android:

– Android browsers have a chromeless mode that blurs or erases the distinction, Safari doesn’t.
– Android supports several browsers, which facilitates organizing usage ( I do web apps vs browsing vs reading, so 3 browsers for me)
– Android’s tab switcher is very similar to its task switcher (and both will soon be merged).

To me in the end, the UIs are the same, the capabilities are very close, it’s a matter of whether you want push and alerts, and some offline capability. Mostly, I don’t.

Rob PhillipsJul 07, 2014 @ 17:31

You say, “By contrast, an iPhone will cost around $600 (without a carrier contract) and the not-so-successful “cheap” iPhone 5C shows that iPhone is likely to remain a premium product.”
Yet the not-so-successful “cheap” 5c still outsells the Galaxy5 in the US. Where is the not so successful? It is after all Apple’s #2 phone. But you are in France so that might explain it.

[…] This post about mobile news apps on the other hand, could have done with a little more. Despite the fact that I’m guilty of it just as much as anyone else, journalism and it’s many theorists should be well passed the point of cherry picking data and badly linked sources. […]

Tete a Tete a TeteJul 08, 2014 @ 03:35

Just as you got everything wrong about html 5, so too will you get it wrong about Android and the future.

People using android phones will do everything on their phones. Ecommerce, banking, payments, scheduling services. It’s just a matter of time because they are lower on the learning curve.

ioS users are more affluent. But when the world does everything through their devices, apple will end up being like American Express – a niche for rich people. But even people with American Express cards dont like them because then can only be used in 10% of the market.

Everyone else will end up doing everything on android powered devices. The mypoic ios user will realize that being able to do everything on a device is more important than looking cool carrying an iphone that is connected to a fractional part of the transaction world.

Low cost, high powered, highly intelligent cloud connected devices will restructure how 85% of the world does business. And this includes the business enterprise.

Frédéric FillouxJul 08, 2014 @ 09:02

@ tete a tete. As for HTML5, at my media company, in order to hedge our bets, we developed a web app that turned out to be not very successful. Speed, lack of storage capacity, fluidity, were among the reasons. So my judgment is also based on experience; plus with the notable exception of the FT.com, I don’t see any success in web app (the NYT web app gathers a negligible traffic).
As for iPhone vs. Android, I use both actually and I used 3 different Android over the last 6 months. I don’t see things I can do more on Android than iOS. Do you?

Sorry, but if html5 (which is indeed a very powerful variant for the web) is the solution, it would have won 3 years ago over real apps. But it didn’t because of the big limitations in performance, security and monetizing. For an Android user this is no problem – it is normal that he spends far less money for his device – a bit of a LINUX effect. All for nothing. And the Android world compensates with power on the processor side (12-core next? SAMESUNG?), RAM and … hardware.
But still there is a big lack in usability in html5 apps. And it is obvious, that html5 developers are very seldom excellent app designers (design, usability and programming), they are techies.
The user understood. And so he didn’t buy into that app system, which is by the way very difficult to curate. The possibility to get a virus on a smartphone via a html5 app is very big.
My judgement is also based on experience. html5 is a nice way to get rid of flash content (not always), but it plays absolutely not in the same league as native apps.

Mike Van HornJul 08, 2014 @ 06:10

Mobile includes phones and pads. Are you lumping these together? I use my iPhone and iPad very differently.

Frédéric FillouxJul 08, 2014 @ 09:07

@Mike Van Horn. IPads and iPhones data are actually difficult to break down. I believe they usage tend to diverge more and more. Which is another issue for publishers. We can’t no longer give the same content for one device that will be used during commute and the other back home with the full attention…

You actually make it seem so easy with your presentation but I find this
matter to be really something which I think I would never understand.
It seems too complicated and very broad for me.
I’m looking forward for your next post, I will try to get the hang of it!

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